Legal Proceedings.
−Removed: Neither we nor our Manager is currently subject to any material legal proceedings, nor, to our knowledge, are material legal proceedings threatened against us or our Manager.
−Removed: From time to time, we and individuals employed by our Manager or its affiliates may be a party to certain legal proceedings in the ordinary course of business.
−Removed: While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
+Added: From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies.
+Added: Additionally, as of December 31, 2022, we owned a multi-tenant office building that is subject to a ground lease.
+Added: The ground lease provides for a new base rent every 5 years based on the greater of the annual base rent for the prior lease year or 9% of the fair market value of the land.
+Added: The next rent reset on the ground lease is scheduled for November 1, 2025.
+Added: We are currently litigating with the landlord with respect to the appropriate method for determining the fair value of the land for purposes of setting the ground rent – Terra Ocean Ave., LLC v.
+Added: Ocean Avenue Santa Monica Realty LLC, Superior Court of California, Los Angeles County, Case No.
+Added: We believe this determination should be based on comparable sales, while the landlord insists that the rent under the ground lease itself is also relevant.
+Added: Our position has prevailed in all three of the prior arbitrations to reset the ground rent.
+Added: We intend vigorously to pursue the litigation.
+Added: While we believe our arguments will likely prevail, the outcome of the legal proceeding cannot be predicted with certainty.
+Added: If the landlord prevails, the future rent reset determinations could result in significantly higher ground rent, which would likely result in a significant diminution in the value of our interest in the ground lease and the office building.
Mine Safety Disclosures.
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